33:010:272 Lecture Notes - Lecture 1: Chicago Board Options Exchange, Financial Statement, Certified Public Accountant
12 Sep 2016
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Document Summary
The accounting language is used to convey financial information that: Provides information about economic events that have already happened. Allows for rational plans for future activities. The accounting language has developed out of a variety of economic situations. There are at least three broadly distinct areas where the accounting function plays an important role: Meeting regulatory requirements for public trading of securities. These functions are referred to as tax accounting, managerial accounting, and financial. All these types of accounting overlap to some extent, particularly in terms of vocabulary, but each area involves a distinct approach related to their specific economic function. In the end, the tax system has to get the consent of the people who are being taxed otherwise it fails. Necessarily, tax policies involve a wide range of political compromises that fall outside the realm of economics. For this reason, tax rules generally have to be looked up and cannot be deduced directly from economic principles.
